What is an “American-made car?” If it comes from GM, Ford, or Chrysler, does that make it “American?” Truth to tell, in the era of globalization, it’s hard to say. Cars can be assembled in America from parts made in Canada or Mexico or any other country on earth. That shiny new Belchfire 5000 in your driveway may look like an American car, but how do you really know? Many people are curious about the upcoming Tesla Model 3. How “American made” will it be?
Every year, the Kogod School of Business at American University studies the US car market and ranks all the cars sold in America according to how “made in America” they really are. Its finding are based on 7 criteria:
- Profit Margin: Where the automaker’s global headquarters is located
- Labor: Where the car is assembled
- Research and Development: Where did it take place
- Inventory, Capital, and Other Expenses: Location of assembly
- Engine and Transmission: Location of production
- Body, Interior, Chassis, Electrical, and Other: Location of production
- National Highway Traffic Safety Administration AALA “Domestic Content” Score
The results of its 2916 study are revealing. Large trucks and SUVs tend to have the highest domestic content. The Buick Enclave/Chevrolet Traverse/GMC Arcadia triplets were first with a rating of 90%, followed closely by the Ford F-150 at 85%. The Honda Accord is the first sedan in the group. It was rated 81%. The Toyota Camry comes in at 78.5%.
You might think that Teslas rate highly, but in fact the Model S only rates 75% American made, which ties it for 12th on the list. The Model X was not rated. But what about the Model 3? Where will it fall in the next Kogod study? The answer depends on the battery. Until now, Tesla has been using battery cells produced by Panasonic in Japan. Those cells are the old 18650 format used by computer manufacturers for 20 years.
But the battery cells for the Model 3 will be the newer 2170 format and will be produced at the Tesla Gigafactory in Nevada. Not only are the battery cells made there, but Tesla has been working hard at acquiring the raw materials, including the lithium needed, from domestic sources.
When Elon was asked recently on Twitter if the Model 3 will claim the title as the car with the most US-made content, he replied:
Good chance it will
— Elon Musk (@elonmusk) February 24, 2017
Estimates are that the Model 3 may be rated as high as 95% US made, a true feather in Tesla’s cap as it seeks to walk a fine line between developing its core business and appeasing the jingoism of Donald Trump and his cabinet of horribles. With things like the federal tax credit for electric cars possibly on the chopping block, making a car with the highest US-made content and assembled in the US by American workers has to offer Tesla some protection from the fusillades of bluster coming from the Potomac these days.
Source: EV Annex